Question 2

On 1 January 2018 the following balances, among others, stood in the books of R Atkins, a sole trader: (a) Income tax, RM210 (Dr); (b) Packing materials, RM740 (Dr). During the year ended 31 December 2018 the information related to these two accounts is as follows: (i) Income tax of RM1,920 were paid to cover the period 1 April 2018 to 31 March 2019; (ii) RM3,150 was paid for packing materials bought; (iii) RM242 was owing on 31 December 2018 in respect of packing materials bought on credit; (iv) Old packing materials amounting to RM63 were sold as scrap for cash; (v) Closing stock of packing materials was valued at RM690. You are required to write up the two accounts showing the appropriate amounts transferred to the Profit and Loss Account at 31 December 2018, the end of the financial year of the trader. Note: No separate accounts are opened for creditors for packing materials bought on credit